Oil dips on signs of profit-taking after rallying in July

London, Aug 1 (BNA): Oil prices edged lower on Tuesday on signs of profit-taking after rallying in July when investors benefited from tightening global supplies and signs of growing demand in the second half of the year.

 

Brent crude futures for October were at $85.89 a barrel at 0822 GMT, down 54 cents. Front-month Brent settled at its highest since April 13 on Monday, Reuters reported.

 

U.S. West Texas Intermediate crude futures were at $81.24 a barrel, down 56 cents from the previous session’s settlement, which was its highest since April 14.

 

“Oil prices may face a correction risk as the markets may have been overbought in the past month,” said Tina Teng, an analyst at CMC Markets.

 

PVM analyst Tamas Varga noted that for months, predictions have been made that global oil demand will grow in the second half of 2023, versus the first half, in tandem with supply cuts to reduce global oil inventories.

 

“The cautious approach was the product of recession worries. Then July arrived and the mood has promptly changed,” he added, citing the action of central banks that has investors more confident that a “soft landing” is achievable and recession avoidable in major economies.

 

 

ZH